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regnum.ru: Sakhalin Energy ready to indemnify for the damage caused by Sakhalin 2 project but skeptical of the figures

The operator of the Sakhalin 2 project, the Sakhalin Energy company, is ready to indemnify the ecological damage caused by the project but is skeptical of the figures given during the Oct 25 conference on the ecological safety of the Sakhalin 2 project, reports Sakhalin.info.

If an objective assessment finds out that the damage caused by Sakhalin Energy to the environment is much bigger than the company’s preliminary estimates, we are ready to make all the necessary payments, says Sakhalin Energy CEO Ian Craig and adds that the company doubts that the figures are precise. He says that the company has made no changes to its estimates of late.

Last time the company changed its estimates was increasing the project expenses from $10bln to $22bln in Sept 2005. Craig says that within a month they are expecting to receive the state expert conclusion concerning the raise in the estimates. He says that they are expecting difficulties, but it’s hard to say what kind of difficulties these will be.

The acting head of the Sakhalin region department of the Rosprirodnadzor, chairman of the commission for ensuring compliance with the ecological legislation during the Sakhalin 2 project Dmitry Belanovich says that in Nov the commission’s experts from the Academy of Sciences and the Rosprirodnadzor will assess the state of flora and fauna on Aniva Bay (the Sea of Okhotsk) and will appraise the damage caused by the local gas processing plant.

“The preliminary damage is 10bln RUR. Sakhalin Energy has substantially deviated from its project documentation, they have failed to coordinate the blasting operations and to present the results of the biometrical survey we have asked for,” says Belanovich.

As REGNUM reported earlier, as a result of inspections, the Rosprirodnadzor has detected a number of violations of the ecological legislation during the Sakhalin 2 project. The Russian Ecology Ministry has decided to reverse the 2003 decision of the state ecological expert department to approve the second stage of the project. In fact, the operator company has failed to fulfill half of the experts’ recommendations.

The Sakhalin 2 project is based on production sharing agreement. The project is developing the Piltun Astokh and Lunskoye fields. Their extractable reserves are 150mln tons of oil and 500bln c m of gas, respectively. The shareholders of the operator company, Sakhalin Energy, are Royal Dutch Shell (55%), Mitsui (25%) and Mitsubishi (20%).

Permanent news address: www.regnum.ru/english/727939.html
12:23 10/26/2006

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